GameStop raised more than $1 billion in its latest, capitalizing on a newly arrived and fervent army of online investors
GameStop raised over $1 billion in its latest stock sale, capitalizing on a newly arrived and fervent army of online investors. The video game retailer has taken center stage among a handful of companies that haveas meme stocks. The phenomenon has pitted smaller of beleaguered companies against large institutional investors who have shorted shares of those companies or bet that shares in those companies will fall.
So far, it’s the smaller investors that are taking home significant gains, though certainly more extensive and more sophisticated investors have since jumped aboard for the ride.Corp., based in Grapevine, Texas, just outside of Dallas, are up more than 1,000% this year. Another , the movie chain AMC Entertainment, is up 2,300% this year. Both companies were under severe pressure before becoming stars in retail investor chatrooms for different reasons.
AMC, already wrestling with thin margins, was hammered by a global pandemic that shut down its theaters and flipped the switch on incoming revenue almost overnight. Problems at GameStop run deeper because technological shifts init into a relic like another once-ubiquitous chain, Blockbuster Video. But GameStop is taking full advantage of its surging to raise desperately needed cash. On Tuesday, The company said it sold 5 million shares in the at-the-market offering or every share it said it might put on the market.
It was the second cash haul for GameStop thisduring the run-up in its stock price. In April, the company said it would sell up to 3.5 million shares in a separate offering. That offering also sold out, and it raised about $551 million. Shares of GameStop, which could be had for about $20 early this year, we’re selling for close to $220 Tuesday after rising another 9% at the opening bell on word of the .
In addition to raising capital, GameStop is also shifting direction to catch up to the changing technology that threatened the company’s existence, namely that gamers are downloadingdiscs from places like GameStop. And a lot of new talent has arrived this to make that happen.
, the co-founder of Chewy, an online pet supply company, revealed that he had compiled a massive stake in GameStop and began agitating for change. Earlier this , the company reshaped its executive leadership team and board, making Cohen its chairman. Under new leadership, the company is attempting to move aggressively into digital sales and earn a loyal following in ways other than its stores, which have generated enormous revenue for almost two decades.